CoreWeave Plummets 8.8%—What’s Driving the Sell-Off?

• CoreWeave (CRWV) slumps to $126.12, down 8.8% intraday from yesterday’s close of $138.29.
• The stock trades near its 30-day moving average of $151.71 after hitting an intraday high of $136.40 and low of $125.67.
• Options volume spikes, with puts at $119–$120 strike prices showing explosive turnover and volatility.

The sharp drop positions CRWV near critical support levels, with bearish technicals dominating amid a quiet news environment.

Bearish Technicals and Oversold RSI Fuel the Slide
CoreWeave’s 8.8% drop stems from a confluence of technical breakdowns. The stock closed below its 30-day moving average ($151.71) for the first time in weeks, signaling weakening momentum. The RSI at 34.0—deep into oversold territory—hints at panic selling or algorithmic liquidation. The MACD histogram’s -5.46 divergence from the signal line amplifies the bearish case, while Bollinger Bands show the price near the lower band ($137.83), suggesting exhaustion but no immediate reversal catalyst. Absent company-specific news, this appears a purely technical-driven selloff.

Bearish Setup and Top Put Options for This Selloff
Technical Indicators:
• 30-day moving average: $151.71 (now resistance)
• RSI: 33.97 (oversold, possible short-term rebound)
• Bollinger Bands Lower: $137.83 (support test imminent)

Trading Setup: The bearish trend is intact below $138, with immediate resistance at the 30-day MA. Aggressive traders may fade the oversold RSI dip, but the MACD suggests a deeper correction. Focus on puts expiring July 18, where high liquidity and volatility meet.

Top Picks:
1. CRWV20250718P120 (Put, $120 strike):
• Implied Volatility: 94.41% (extreme fear premium)
• Leverage Ratio: 31.32% (premium to equity moves)
• Delta: -0.32 (moderate downside exposure)
• Theta: -0.15 (time decay advantage)
• Turnover: $1,814,681 (top-volume contract)

This contract benefits from extreme volatility and massive liquidity. With theta at -0.15, time decay favors holders as expiration nears. A 5% downside to $120 would trigger max payoff of $0.33/share, yielding 31.3% return—ideal for a sharp drop.

2. CRWV20250718P119 (Put, $119 strike):
• Implied Volatility: 97.82% (sector-leading fear)
• Leverage Ratio: 32.45% (supercharged returns)
• Delta: -0.31 (sweet spot for directional plays)
• Gamma: 0.019 (sensitivity to price swings)
• Turnover: $293,780 (high liquidity)

This deeper-in-the-money put offers better leverage with minimal theta decay. A $126-to-$119 drop (5.6% decline) would yield a $1 payoff/share—32.45% return. Its gamma ensures gains accelerate as price falls.

Hawkish Take: Fade the RSI bounce below $138 with CRWV20250718P120. Breaks below $125? Layer in P119 for the next leg.

Backtest CoreWeave Stock Performance
The iPath S&P 500 VIX Short-Term Futures ETN (CRWV) has historically shown strong recovery performance following a -9% intraday plunge. The backtest data reveals favorable win rates and returns across various time frames, indicating that CRWV tends to rebound significantly after such events:1. Frequency and Win Rates: The event occurred 33 times over the backtested period. The 3-day win rate is 57.58%, the 10-day win rate is 60.61%, and the 30-day win rate is 66.67%. This suggests that CRWV has a higher probability of a positive return in the short term following the intraday plunge.2. Returns: The average 3-day return is 8.21%, the 10-day return is 19.73%, and the 30-day return is 68.97%. These figures indicate that CRWV tends to deliver substantial returns in the days following a -9% intraday drop.3. Maximum Return: The maximum return during the backtest period was 74.62%, which occurred on day 35. This highlights the potential for significant gains if held for an extended period after the initial plunge.In conclusion, CRWV has demonstrated robust recovery performance after a -9% intraday plunge, making it a potentially attractive investment opportunity for those looking to capitalize on short-term volatility.

CRWV’s Bear Market Grind—Watch $125 and Sector Leadership
CoreWeave’s slide isn’t sustainable unless fundamentals collapse, but technicals argue for more downside. The $125 level—a 2023 support pillar—is critical; a breach could test $119 strike puts. Meanwhile, sector leader Equinix’s (-0.2%) muted action shows the sell-off is idiosyncratic. Monitor the 30-day MA ($151.71) for a potential short-covering bounce. For now, the playbook is clear: short volatility, long puts, and wait for a catalyst—anywhere but the charts.